Elon Musk said Tesla's $35,000 Model 3 would arrive by the end of 2018. Here's why experts say that probably won't happen.

The Model
3 was presented as Tesla's
first mass-market vehicle - but so far, Tesla has made only
premium versions of the Model 3 with long-range
batteries.

Tesla
CEO Elon
Musk gave a timeline in May suggesting that deliveries of
the $35,000 base-priced Model 3 could begin between the end of
September and the end of December.

But it's more likely those deliveries will begin in
2019 as Tesla focuses on generating higher profits with more
expensive models, according to Jeremy Acevedo, a manager of
industry analysis for Edmunds.

Tesla declined a request for comment on this story.

The turbulent history of Tesla's Model 3 has been
well-documented.
Praised by
reviewers but subject to production delays and reports of
inconsistent quality, the vehicle has put pressure on Tesla
to prove it can transition from a luxury automaker to a
mass-market one.

In June, the company
met a long-delayed goal of making 5,000 Model 3s in one week.
But in addition to sustaining that rate of production, it has a
new hurdle to clear: delivering the $35,000 base-priced version
of the Model 3 that prompted Tesla to make the car in the first
place.

So far, the company has made only premium versions of the Model 3
with long-range batteries. The least expensive Model 3 currently
available starts at $49,000, according to Tesla's website.

In May, Tesla CEO Elon Musk suggested the company would start
delivering the $35,000 model three to six months after
reaching its 5,000-per-week production goal, meaning deliveries
would start sometime between the end of September and the end of
December. Musk pushed back that timeline in June, saying Tesla
would start making $35,000 Model 3s near the end of 2018 and aim
for mass production in 2019. Tesla is even more conservative
on its
website, which says the base model will be available in four
to seven months.

Tesla declined a request for comment on this story.

The $35,000 Model 3 may not arrive until 2019

According to Akshay Anand, an executive analyst for Kelley Blue
Book, and Jeremy Acevedo, a manager of industry analysis for
Edmunds, the timeline on Tesla's website is the most realistic.
Both said it would be highly unlikely for deliveries to begin in
September and more likely for them to begin in 2019.

That schedule is likely to concern some customers, as they will
begin to lose access to a $7,500 tax credit for Tesla vehicles in
January,
when it gets cut in half.

While Tesla has had no problem generating demand for the Model 3
- the company said in a
regulatory filing that it had about 420,000 net reservations
for Model 3 at the end of June, though it has since stopped
taking reservations - the long wait for the base model will turn
away some customers who might have otherwise bought it, Acevedo
said.

Tesla "can expect, I think, a substantial amount of people
pulling their reservations," Acevedo said.

According to Acevedo, the primary reason for the delay is Tesla's
quest to become profitable. The company said in its
second-quarter earnings letter this year that it expected to
post consistent profits starting in the third quarter, and the
high-end Model 3s generate better margins than the base model
would. In August, analysts from the investment bank UBS
tore apart a Model 3, analyzed its construction, and
projected that a $35,000 Model 3 would generate a loss of $5,900
per vehicle.

Quality is more important than speed

In the near term, Tesla will focus on the more profitable models,
Acevedo said. Musk indicated the same in May, when he said Tesla
would "lose
money & die" if it started delivering the base model.

That may frustrate people who were among the first to reserve a
Model 3 in March 2016. But according to Anand, it's important
that Tesla prioritizes quality over delivery speed for all
versions of the Model 3.